Post-Adoption Implementation of IFRS Benefits in Ethiopia; Evidence from the Banking Sector
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Date
2021-06
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A.A.U
Abstract
Different nations & companies implement IFRS standard in expectation to a number of benefits.
So the aim of this study is to examine the post implementation benefit of IFRS in Ethiopia.
Notwithstanding to proponents of IFRS there is a profound argument from scholars that benefit
of IFRS gained not only by moving to a single set of accounting standard but also relied (directly
attributed to) on supporting institutions; which constitutes for the effectiveness of IFRS
implementation in each nation. Therefore the researcher assesses the benefit materialized, the
effectiveness of IFRS implementation and finally measuring the extent to which the benefit
materialized followed the effective IFRS implementation. To achieve this objective, both primary
and secondary data were collected from IFRS implementation team members of 18 commercial
banks. Sampling method purposive based on their role and involvement in the implementation
process. Primary data were collected based on 5 point Likert scale structure questionnaires and
interview questionnaires; whereas secondary data based were collected through documentary
evidence. The Likert data smoothed by triangular fuzzy number before further analysis began
using SPSS. The questionnaire data were analyzed using descriptive statistics, correlations,
multiple linear regression analysis and structural equation modeling. Data from interview and
document reviews were interpreted qualitatively. The statistical result show that reliable and
comparable financial report produced, the benefit outweighed the cost of implementation of
IFRS, reduced uncertainty and information asymmetry in the financial reports provided. The
findings of the study also show that with the exception of culture the other variables educational
level and professionalism, economic growth, legal protection and monitoring & enforcement
positively and significantly influenced effective IFRS implementation. Finally, the study
confirmed that the benefit of IFRS acquired followed effective IFRS implementation. From the
finding of the qualitative data, international consulting firm played a major role for the effective
implementation of IFRS; so this finding is in a conscience with AMOS result why it rejected
educational level as an explanatory variable for effective IFRS implementation.
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Keywords
Implementation benefit, effective IFRS implementation, commercial Banks